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STATEMENTS BY SENATORS;Broadband – 03 Dec 2014

Before the last election, in its broadband policy launch, the then opposition, now government, promised to deliver a National Broadband Network sooner than Labor and for less capital. Despite offering a second-rate broadband network, any savings the government might have achieved over Labor’s network are marginal at best, and the rollout is proceeding at a snail’s pace. It is ironic that the coalition’s multi-technology mix was supposed to speed up the rollout of the NBN when in fact the switch to the new model has actually slowed it down, so much so that the government has already broken its promise to deliver speeds of 25 megabits per second to every premise by the end of its term.

The latest rollout plan released by NBN Co last Monday shows that fewer than half of Australian households and businesses will be passed by the NBN over the next 18 months. NBN Co is now committing to have the remainder of premises connected to the NBN by 2020. This is despite the Prime Minister promising that all Australians would be able to get an NBN connection by the end of 2016.

In the 10 weeks prior to the election, the NBN rollout was passing an average of 4,290 brownfields premises per week. Data released in August showed that the 10-week average had slowed to 2,707 premises per week. Despite promising to deliver the NBN faster, the rollout has slowed down since the election. So the Government’s broadband rollout has come to a grinding halt, in fact, all for the sake of switching to technologies that will deliver a second-rate broadband network.

The Liberal-National coalition continue to demonstrate, as they did before the election, that they just do not get it when it comes to Australians’ need for broadband speed. The now Prime Minister, Mr Abbott said at the coalition’s policy launch:

We are absolutely confident that 25 megs is going to be enough, more than enough, for the average household.

Well, Minister, it may be now, but I doubt it will be by the time your second-rate NBN is built.

We live in a world where the demand for broadband speed is roughly doubling every 18 months. The average household may not need 100 megabits per second now, but it will not be long before they do. Many other countries around the world are delivering fibre-to-the-premises broadband with speeds of 100 megabits per second or more. South Korea, which has the largest number of fibre connections per head of population, is delivering speeds of 1 gigabit per second and is set to unveil a service which provides speeds of 10 gigabits per second.

If coalition members and senators cannot imagine what anyone would need 100 megabits per second for then that is a failure of their imagination. And we have a Minister for Communications who clearly lacks imagination, because he seems to think that 25 megs is enough. In order to prove his point, Mr Turnbull paid his mates $2 million to produce a cost benefit analysis that favoured his broadband plan, even though he promised before the election to give this task to the independent Productivity Commission or Infrastructure Australia. The authors of the report included known critics of the NBN such as economist Henry Ergas, as well as former staff of the minister. Is it any surprise that they came up with the answers the minister wanted?

According to Minister Turnbull’s cost benefit analysis, the median household in Australia will require a download speed of 15 megabits per second by 2023. What makes this finding so absolutely ridiculous is that it suggests demand for broadband speed in Australia is actually going to go backwards. At the end of the last financial year, NBN subscribers were purchasing plans with an average download speed of 36 megabits per second. The report said that by 2023, only five per cent of Australians will want 45 megabits or more yet almost a third of households connecting to the NBN now are ordering plans of 50 megabits per second or more.

We know that NBN plans, both wholesale and retail, are priced according to speed, so if households do not need 25, 50 or 100 megabits per second now why are they paying all that extra money for bandwidth they do not need? Or could it be that those opposite are such luddites that they do not understand what an important utility fast broadband is now, and is increasingly going to be into the future for households and businesses? 2023 is nine years away.

Consider what broadband speeds were like back in 2005 and the applications that are available now that could not have been dreamed of then, and you will see how ridiculous it is to think that 15 megabits per second would be acceptable to an average household almost a decade from now. Even NBN Co CEO Bill Morrow thought that the report was rubbish. Mr Morrow said on Radio National in August, ‘I suspect … when they talk about 15 megabits per second being sufficient for people today, I think that likely is taking a snapshot in today’s environment. What will tomorrow be, what will next year and the next decade require, I think is really the question. I think we need to ask the panel how they came up with the 15 megabits per second.’

The cost-benefit analysis not only understated the benefits of fast broadband it hugely overinflated the cost of delivering fibre to the premises. Documents leaked to The Age showed that changes in the construction model put in place by NBN Co’s board and management last year resulted in fibre to the premises being delivered faster and cheaper than previously. The documents showed that fibre to the premises had been rolled out in Melton in Victoria 50 percent cheaper and 61 percent faster than in comparable suburbs. Given this fact, it is questionable whether there really will be any cost and time savings from the coalition’s second-rate multitechnology mix model and that even if there are they would be marginal at best.

There is no good reason for the government not to continue the fibre-to-the-premises rollout and deliver Australians the broadband they want and need and which will make our nation internationally competitive—no reason other than they are politically invested in their second-rate broadband plan and that it would be too embarrassing for them to admit that they got it wrong. Or maybe Minister Turnbull is just following his original orders from when Mr Abbott first appointed him as communications spokesman, to ‘demolish’ the NBN?

This brings me to the fibre-to-the-premises rollout in my home state of Tasmania. Another broken promise on the NBN, one that is particularly galling to me as a Tasmanian senator, was the promise to ‘honour existing contracts’. This is something Liberal members and senators, including Minister Turnbull and Senator Bushby, kept repeating prior to the last election in response to questions about whether Tasmania would receive the full fibre-to-the-premises rollout.

We know that these were weasel words, designed to give the impression that the full fibre rollout in Tasmania would be delivered without them explicitly saying so. If that was not the impression those opposite were intending to give, why did they not correct TasICT chief executive, Dean Winter, when he said publicly that he took that to mean the full Tasmanian fibre-to-the-premises rollout would be delivered? In fact, Senator Bushby explicitly made the statement that he understood there to be contracts in place for the full fibre-to-the-premises rollout. On 17 August last year, Senator Bushby said:

We understand that those contracts are in place to roll out right across the state, and if that is the case, we will honour that.

Well, last night in a public hearing of the Senate NBN committee, at which I was present and asking questions, NBN Co’s Chief Operating Officer, Greg Adcock, said that the contract with Visionstream was renegotiated around a number of elements, including price, technology and time lines. So, no matter what weasel words those opposite used then and continue to use now, they gave the clear impression to Tasmanians that the full fibre rollout would be delivered. Anything less is another lie and another broken promise.

Forty-thousand premises in Tasmania were included in the fibre-to-the-premises rollout plan in July 2013. Contracts were in place to deliver fibre to these premises, and now most of these premises are being told they will only receive the second-rate multitechnology mix under the new rollout plan. This includes households and businesses in suburbs such as Risdon Vale, Claremont, Glenorchy, Margate, Brighton, Pontville, Cremorne and South Arm and, in the north of the state, Newnham, South Launceston, Prospect, Kings Meadows and Legana.

Many Tasmanians would have voted for the Liberal Party at the last federal election in the mistaken belief that they were committed to the full fibre rollout in Tasmania. It is modern infrastructure that would make Tasmania internationally competitive and deliver the jobs that our state so desperately needs—yet, once again, Tasmanians have been misled, betrayed and constantly lied to by this government. I will keep fighting for the hundreds of thousands of Tasmanians to get the broadband service they were promised and so richly deserve.